How BayPort Credit Union is educating members about lending options

BayPort Credit Union in Newport News, Virginia, is giving members a new tool that shows them what loan products and rates they qualify for without negatively affecting their credit scores. 

The $2.4 billion-asset credit union began exploring the "Get My Rate" solution in 2020 as part of its preexisting partnership with the credit score technology firm SavvyMoney in Dublin, California, which has been providing BayPort with its NCR Credit Score service for members since February 2020.

Using an external portal hosted by SavvyMoney but bearing BayPort branding, both external consumers and internal members are invited to input personal details such as their Social Security number and date of birth for a soft credit check as part of the prequalification process. Findings are then compared to the credit union's underwriting criteria to give the applicant all eligible credit products and associated rates, both from BayPort and other competing institutions, for review before formally applying.

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Nancy Porter, vice president of marketing for BayPort and a member of SavvyMoney's advisory board, recounted how she was driven to beta test the tool as support for a widespread advertising campaign to onboard new members while also strengthening the credit union's internal procedures for lending.

"For me, and for growth, we need to have a core competency for lending and not shop it out to an upstart. … We need to own it ourselves," Porter said.

She explained how research into the effectiveness of other promotional efforts run by the credit union found that ads related to personal and auto loans yielded the highest conversion rates last year. Combined with "what's happening in the current rate environment and the 'R word' of a possible recession," the new rate checking solution will help BayPort compete against larger players in the lending ecosystem, she said.

"We feel that this tool, which I've waited with bated breath to launch and market, will give us a fair fight in the digital world," Porter said. 

Get My Rate debuted on Sept. 4. According to the credit union, the number of loan applications it receives doubled within the first month of use. The company declined to share the numbers.

SavvyMoney leaders remarked that the solution additionally provides consumers with rates available from other financial institutions in their area, while incorporating educational resources for helping improve credit scores and meeting other financial goals.

"Credit unions and community banks are always fighting for the younger, next generation of customers, so for the consumer that doesn't have a great credit score, tools like the ones offered by BayPort before they even sign up help build lifelong relationships," said Chris Fraenza, chief revenue officer for SavvyMoney.

A survey of more than 200 banking professionals released earlier this year by Arizent, the publisher of American Banker, found that 58% of respondents held that new customer acquisition and improved customer loyalty were the top two goals driving digital tech adoption for 2023.

For those unable to internally develop modern solutions, partnering with specialized fintech firms has become an increasingly viable option, leading the National Credit Union Administration to publish finalized rules on collaboration between the two for functions such as loan purchasing and overall innovation.

Examples include the $1.5 billion-asset Sierra Central Credit Union in Yuba City, California, which launched an artificial intelligence-powered auto lending tool in May of this year to strengthen its portfolio, as new and used vehicle funding accounted for more than 56% of its $922 million lending activity last year.

The solution was developed by Zest AI and available through Origence, a credit union service organization that offers lending technology and services to credit unions nationwide which include an indirect lending program helping connect credit unions with auto dealers across the U.S..

But advisors and other financial strategists say that successful solutions need to be dynamic and help guide the member through concerns, rather than simply providing them with the resources to fend for themselves.

Banks have focused on education and "do it yourself" tools in the past, but have found that the lack of personalization has driven them to find other institutions that can better tailor resources to suit their needs, said Mark Schwanhausser, director of digital banking for Javelin Strategy.

"One of the big transitions that is yet to come, is the move from a banker's mentality of 'I'm giving you all the tools and the information for you to make a decision on your own, so do it yourself' to one in which [the institution] is going to be an ongoing part of your digital banking relationship," Schwanhausser said.

Generation Z and millennial consumers are placing a higher emphasis on modern solutions and the all-around customer experience they get from their financial institution of choice, pulling from their interactions with large retailers like Amazon.

"Now, especially with the younger demographics which is where it really counts, there are major brands that have digital presences like Amazon that are setting the bar," for what a customer experience can be, said Stewart Watterson, strategic advisor for Datos Insights.